Editor's note: An earlier version of this story incorrectly mentioned National Semiconductor (NYSE:NSM) as fabless. National Semiconductor is not a fabless company. The Fool apologizes for the error.

Some will stand in silence, while some just scratch their scalps at the curious ways of Mr. Market. That's when you swoop in, pick up the severely mispriced stocks of excellent businesses, and sit back for awesome long-term returns.

Microchip designer Linear Technology (NASDAQ:LLTC) is one of those scalp-scratching mismatches today. The company reported a perfectly fine first quarter last night, well within earlier guidance from the management team. Earnings grew 4% to $0.48 per diluted share, year over year, partly thanks to a one-time tax benefit. Sales inched up 10% to $310 million. And the stock price imploded.

Linear is 17% cheaper today because CEO Lothar Maier had the nerve to acknowledge that there's a financial crisis going on around us all. Maier said his company saw dwindling order volumes across all markets in early October, and estimated that sales will clock in some 10%-20% lower in the next quarter. So times are tough for semiconductor companies, just like everybody else.

And that's where the profit opportunity comes in. Linear has a rock-solid balance sheet with more than $1 billion in cash equivalents, and its operating profits can pay off the interest on its modest borrowings about 10 times over. The capital expenses of running Linear's manufacturing lines are small because you don't need bleeding-edge processes to make the analog chips that are Linear's bread and butter. And Maier noted that many of his expenses are variable, and the company is already cutting back where it makes sense.

So Linear may not be quite as insulated from economic trends as fabless chip slingers like Broadcom (NYSE:BRCM) or Atheros (NASDAQ:ATHR), who simply hand off manufacturing to someone like Taiwan Semiconductor (NYSE:TSM). Its checkbook is not quite as large as Texas Instruments' (NYSE:TXN) -- but neither are its expenses. However, this company is a balanced mix of risk and opportunity, and it looks very tasty at these prices. Linear is ready for an extended period of slow going and should bounce back very quickly when the worst is over.

The short-term sellers are running rampant here. Unless you think this market crisis is permanent, this looks like a great time to pick up some Linear stock. Feel free to scratch your scalp while making up your mind.

Further Foolishness:

Atheros Communications is a Motley Fool Hidden Gems selection. Linear Technology is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Anders Bylund owns shares in Taiwan Semiconductor, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.